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Audit Planning Requires That the Auditor Consider Possible Inventory Errors

question 81

Essay

Audit planning requires that the auditor consider possible inventory errors or frauds that might occur that could affect the financial statements.For each of the types of inventory errors listed in the following table,indicate what would be the possible effect in the inventory and cost of sales accounts: overstated,understated,or no effect.


Definitions:

Smoke Cigarettes

The act of inhaling and exhaling the smoke produced by burning tobacco in rolled paper.

Illicit Drugs

Substances whose production, sale, or use is prohibited or strictly controlled by law due to their potential for abuse and addiction.

Health Trend

A pattern or general direction in health behavior or outcomes that is observed over time within a population.

Acute Illnesses

Diseases or conditions that develop suddenly and last a short period of time, often requiring urgent care.

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